S&P 500 Holds as Bank Earnings Offset Tech Selloff
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- IBM warned of a software-business slowdown and saw its stock plunge 25% on Tuesday, the latest example of AI disruption upending a blue chip and the trigger for the week's market anxiety.
- Chip stocks absorbed the heaviest sector damage — the iShares Semiconductor ETF fell 8.8% for the week on volatility in memory leaders Micron Technology and SK Hynix, dragging the Technology Select Sector SPDR down 4.5% and making it the worst-performing sector ETF.
- Goldman Sachs surged 9% to a record high after second-quarter earnings, with JPMorgan Chase also trading at a record; Bank of America, BNY, and Morgan Stanley hit or neared all-time highs, lifting the SPDR S&P Bank ETF 3.7% and pushing the Financial Select Sector SPDR to a new all-time high (up 1.9% on the week).
- Index impact was muted: the S&P 500 lost just 0.6%, the Nasdaq Composite 1.5%, and the Dow was on track to finish down only 0.2% through Thursday — evidence, the article argues, of a broadening rally cushioning the tech drawdown.
- Phil Orlando of Federated Hermes expects continued rotation out of overheated semiconductors into value sectors like financials, healthcare, and industrials, and projects the S&P 500 reaching new all-time highs near 8000 by year-end.
- Mary Ann Bartels of Sanctuary Wealth raised her year-end S&P 500 target to 8225, branding the second half a 'Bucking Bull' that keeps climbing through sector rotation rather than a straight line.
- Earnings expectations remain the hinge: FactSet forecasts 24.4% S&P 500 earnings growth for Q2, 27% for Q3, and 24.6% for Q4, with results from Alphabet, Tesla, Texas Instruments, Intel, Charles Schwab, GE Vernova, AT&T, and American Express due in the coming week.
Why it matters: The S&P 500's resilience this week — down just 0.6% even as tech cratered 4.5% and IBM fell 25% — rests almost entirely on bank earnings (Goldman +9% to a record, Financial Select Sector SPDR at an all-time high) absorbing the selloff, so the next week's reports from Alphabet, Tesla, and the chip names will determine whether the 8000–8225 year-end targets survive or whether the rotation runs out of buyers.
